Last time I was here was about 18 months ago.
Or as we say in Australia – that’s about one prime-minister-ago
That also applies to the UK where they’ve had a change of leader recently.
I actually met with Boris Johnson on my last visit to the UK last year.
When it came to Brexit, he told me it was either “resolution or revolution” – and he’s proven to be true to his word.
Boris is actually a big fan of NSW and was full of praise for how our state is going.
In fact, that was a sentiment that was widely shared over there.
Unfortunately it hasn’t been matched by our presence on the ground.
When visiting Australia House, I discovered that while every other Australian state has an Agent General representing them – NSW does not.
Our presence is dwarfed by states like Victoria and Queensland.
Even South Australia is bigger and better than us.
In fact, thanks to the efforts of their Agent General, Bill Muirhead, Alexander Downer once remarked that “South Australia’s going better in London than it is in South Australia”.
This is emblematic of our current trade and investment strategy.
For too long, NSW has coasted on its natural talent and good looks.
Last week the Committee for Sydney released its 2019 Benchmarking Sydney report.
It found that Sydney is the second most admired city in the world – after Tokyo.
But it also found a whole range of areas where Sydney needs to lift its game.
One finding – sums up Sydney’s status today: that our city is on the cusp of joining London, New York and Paris as a top-tier global city.
I call that – damning with faint praise.
There is no question Sydney is a city on the world stage.
Forget Canberra – Sydney is our nation’s real capital.
But if Sydney was a cricketer – we might make the World 11, but we’d also be the player that everyone says has loads of talent – but isn’t fulfilling its potential.
As Treasurer of NSW – I don’t want our state to be on the cusp of top tier.
I want NSW to be top tier.
Because that is what will give the people of our state the best chance at having the highest standard of living anywhere in the world.
We want the best job opportunities for our children right here.
We want the highest levels of prosperity, and the fastest growth.
We want NSW to be the envy of Australia and of the world because of the kind of life you can make here for yourself and your family if you work hard.
And that’s why – two weeks ago – we launched a new Economic Blueprint for NSW.
The blueprint identifies the global mega-trends that will shape our future.
And it sets the economic direction for our state in the decades to come.
One of the Blueprint’s central themes is to make NSW more ambitiously outward focused.
It highlights the need for greater diversity in our export base and our trading partners.
And also the need to make NSW more attractive to foreign and domestic investors.
Because the biggest and best opportunities for our people will be located in markets outside our state’s borders.
NSW must enhance its reputation as Australia’s gateway to the world – and the world’s gateway to Australia.
To do that, we need a new approach to Trade and Investment in NSW.
As the Blueprint says, while Sydney has a strong international reputation as a tourist destination:
There is a need for a new ‘Brand NSW’ that appeals to foreign investors, business visitors and international students, not just tourists.
It needs to appeal to entrepreneurs looking to invest and hire.
It needs to focus on Sydney’s importance as a financial sector hub and the advantages and attractiveness of the regions.
This morning I joined the Premier and Deputy Premier to announce the first concrete step to realise this vision.
A new Trade and Investment strategy – Global NSW.
Today I want to outline what the new strategy looks like – and
what it will deliver for our people.
Why we need a new approach
First – why we need a new approach to trade and investment in NSW.
There are four main reasons.
The global order is changing
Number one – a future-focused NSW economy must be more outward looking.
The single largest economic opportunity for NSW lies in Asia’s booming middle class.
More than half of the global middle class will be located in Asia by 2030.
This is happening right on our doorstep.
We have the best skilled workforce – the best conditions for doing business – the industrial capacity – the supporting infrastructure – and we are perfectly located.
No other state or nation is better placed to provide the goods and services this booming market will demand.
Other major changes are sending ripples around the world.
There is Brexit and the opportunity that presents.
It also means now is the time to forge new ties with European nations.
NSW must reinforce our strong cultural and security alliance with our number one ally in the USA.
And we must also continue to strengthen ties with our number one trading partner in China.
In this global context, today’s NSW economy remains heavily weighted towards domestic activity.
Exports make up just 16 per cent of our economy.
And only around 3 per cent of NSW businesses are exporters.
Having said that – exports have been growing rapidly – at an average 6.5% per year since 2014.
So we must build on that momentum – and move our economy to one that is better able to deliver to overseas markets.
We are losing ground on foreign investment
The second reason we need a new strategy is that we have been punching below our weight when it comes to attracting investment.
Foreign direct investment is crucial for job creation, research and development, and driving better productivity in local industries
Attracting new investment, and the talent, capital and ideas it brings, is highly contestable.
But other states – and indeed our competitors in the region – are beating us to the punch.
They don’t have our natural advantages, so need to do more.
They are dedicating more resources, bigger budgets and smarter campaigns.
We need to not only match them – but go even further.
Our international presence is lacklustre
Reason number three is related to number two – our overseas trade and investment networks are underdone.
In size and seniority we are falling well short of other states.
Our network consists of just 21 people across 11 offices.
Victoria has four times the number of people in twice as many locations.
And Queensland and WA are streets ahead too.
The small size of our network means we don’t have a presence in key markets.
No agent general in the UK.
No NSW office in mainland Europe.
No presence in South America.
And just one office for the entire Indian market.
As the global geopolitical order rapidly transforms, our network needs to be where it can have the biggest impact.
Our brand lacks clarity
The fourth reason we need a new strategy is that “Brand NSW” is not clear, either here or abroad.
Our international presence falls under a range of different banners.
We are not “one NSW” – we are a mish-mash of agencies with no common purpose.
At home, there is a lack of clarity about which sectors – industries – and precincts are the ones we want to promote to the world.
It’s all well and good to want NSW to succeed on the global stage.
But that will only be possible if we know what we are trying to sell – and where we are trying to sell it.
Summary – why we need change
The truth is we could be working a lot harder and a lot smarter on trade and investment.
While we have been getting by on our natural advantages, other states have been working harder, because they have to.
So they are getting results – and we are missing out.
To give you a few examples:
European grocery chain Kaufland (Cow-Fland) chose Melbourne over Sydney for their future head office, distribution centre and first three stores in Australia.
1,600 jobs for Victorians, not our people.
Chinese conglomerate Alibaba also chose Melbourne for their Australian/New Zealand headquarters.
And a string of global tech companies have too – including Slack, Stripe, Square and GoPro.
Meanwhile Brisbane has snagged the Japanese ICT and telecommunications investor Softbank.
Don’t get me wrong – Sydney is home to the Australian or regional headquarters of more than 600 multinationals.
That’s without even really trying.
But we are more than just the Harbour Bridge and the Opera House.
We are Australia’s economic powerhouse.
And it’s time we started fulfilling our true potential.
Global NSW: a new strategy for a new century
So we are starting fresh, with a new strategy – Global NSW – to take us to the world like never before.
Global NSW will brand our state as Australia’s Global Hub: Connected, Smart and Vibrant.
When businesses and investors overseas think of Australia – we will make sure the gateway they think of is NSW.
And that they know our state has the infrastructure, the workforce, the business conditions, and the drive to be the obvious launchpad into the regional markets on our doorstep.
The strategy has three pillars.
First – we will answer the question: what will NSW be famous for?
What will we do better than anyone else in the world?
That means identifying and nurturing the sectors and industries that have the strongest prospects for growth – and where NSW should be a world-beater.
We have nominated Key growth industries including:
- Defence and aerospace
- Food and agribusiness
- And infrastructure
We will work with industry to develop sector and sub-sector strategies and delivery plans.
And the first three will be Advanced Manufacturing, Aerospace and Defence, and Technology.
We will also build on our work to make NSW the strongest innovation ecosystem in the Southern Hemisphere, through initiatives like the Sydney Startup Hub.
The second pillar is to create an environment that will help these sectors to thrive.
We will do this in a much more targeted and coordinated way, by identifying five Lighthouse Precincts with a distinctly global outlook.
- The Western Sydney Aerotropolis.
- The Sydney Innovation and Technology Precinct.
- And the Westmead Health and Education Precinct.
And in regional NSW
- The Parkes Special Activation Precinct.
- And The Wagga Wagga Special Activation Precinct.
Clustering firms in precincts is a tried and tested way to attract investment and develop healthy export industries.
Precincts accelerate innovation, drive job creation, and push wages higher.
Done well, they can become vibrant communities where people want to live and work.
For example, the MaRS Discovery District in Toronto, Canada is home to more than 1,200 startups.
For the people of Toronto, this has generated around 12,000 jobs.
And it has attracted more than $4.8 billion in venture capital investment.
Here at home our Sydney Startup Hub is already having a huge impact.
It houses 4 leading tech incubators supporting 440 startups, and so far has generated more than 1,000 jobs and raised $250 million in investment.
Our Lighthouse Precincts will create these kinds of opportunities built around the industries that will support our future.
Our investors and trading partners overseas will have a much clearer idea of what NSW can do.
And they will better understand how these Precincts are designed to reach global markets quickly and efficiently.
Regenerating our international networks
The third pillar is to establish an international trade and investment network that befits our state’s size and stature.
A network that deliberately aligns priority sectors and Lighthouse Precincts with the export markets they service and the investment they need to thrive.
The new network will be a hub-and-spoke model – with all NSW representatives operating under the one brand and working towards the same objectives.
There will be six hubs, each be led by a Commissioner – or an Agent General in the case of London.
And we will be aiming to establish nine new offices as “spokes” in addition to the existing network.
Once complete, we will have:
A hub in New York – for the Americas, with spokes in San Francisco, Washington, D.C., Santiago, and Toronto.
A hub in London – for the UK, EU and Israel – with spokes in Frankfurt and Paris.
A hub in Shanghai – for China, with spokes in Guangzhou, Beijing and Hong Kong.
A Singapore hub – for South East Asia, with spokes in Jakarta, Kuala Lumpur, and Ho Chi Minh City.
A hub in Mumbai for India and the Middle East, with spokes in Bangalore and Abu Dhabi.
And a hub in Tokyo, for Japan and the Republic of Korea, with a spoke in Seoul.
This network will give NSW a physical presence in 21 cities.
These offices are not intended to be cushy perks of the public service.
They will be staffed by people with the skills, seniority, and local knowledge and relationships to deliver results for NSW.
This new network will enable NSW to leverage our free trade agreements, and tap into markets that are poised to boom.
To give you an example, one market that I believe will feature prominently in our future is India.
India is a complex nation – and anyone who has tried knows it’s not always easy to do business there.
India today is where China was 30 years ago.
And there is no doubt that it will rise to the status of global economic superpower in the decades to come.
According to the World Economic Forum, by 2035 three of the world’s top 10 cities by GDP growth will be in India.
The other seven will all be in Asia – four of them in China alone.
That means now is the time to establish better relationships and pathways for stronger economic ties between NSW and the fastest growing markets.
And that is what our strategy will do.
This new strategy isn’t rocket science – but it will put our rocket scientists on the world map.
It’s the next step in our plan to build prosperity for the people of NSW.
Head of Relationships
Lastly, we’re also taking a leaf out of the private sector playbook and focusing a lot more on relationships.
We want to proactively manage our Top 50 foreign direct investors and target their investment in the precincts where they will get the best commercial outcomes
A key initiative for the mobilisation of Global NSW is the establishment of the role of the Global Head of Relationships.
This role, reporting to the Treasury secretary, has responsibility for developing, engaging and maintaining relationships with top tier foreign and national investors.
It will provide a ‘One NSW’ approach to our key investors and drive better outcomes.
To conclude, we are moving quickly to make Global NSW a reality.
On January I will be in the UK once again to further strengthen the NSW-UK relationship.
On my last visit, I was able to take part in the 100 year anniversary celebrations of Australia House – and also of Australia’s first High Commissioner to the UK, George Reid.
George Reid is a giant of Australian history.
Prime Minister. Premier of NSW.
And the pinnacle of them all – a clerk at NSW Treasury.
But he was also Australia’s first High Commissioner to the UK.
When Reid came to London in 1910, England’s other major colonies – New Zealand, South Africa, and Canada – already had a strong official presence in London.
Australia was late to the party.
George Reid’s job was to change all that.
And he did.
In the words of one journalist, “he made Australia known to London.”
Our new strategy aspires to do for NSW what George Reid did for Australia – not just in London, but all around the world.
It’s time to put NSW back on the map.